Is Cepheid (NASDAQ:CPHD) a good investment?
To many of your peers, hedge funds are viewed as delayed, old investment tools of an era lost to time. Although there are more than 8,000 hedge funds in operation currently, Insider Monkey focuses on the aristocrats of this group, close to 525 funds. It is assumed that this group controls most of the hedge fund industry’s total capital, and by tracking their best picks, we’ve deciphered a few investment strategies that have historically beaten the S&P 500. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we‘ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Just as key, optimistic insider trading sentiment is another way to look at the investments you’re interested in. Just as you’d expect, there are lots of stimuli for an insider to downsize shares of his or her company, but just one, very obvious reason why they would buy. Several empirical studies have demonstrated the market-beating potential of this method if shareholders know where to look (learn more here).
Now that that’s out of the way, let’s discuss the latest info for Cepheid (NASDAQ:CPHD).
What have hedge funds been doing with Cepheid (NASDAQ:CPHD)?
At the end of the second quarter, a total of 10 of the hedge funds we track held long positions in this stock, a change of -9% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully.
When using filings from the hedgies we track, Redmile Group, managed by Jeremy Green, holds the biggest position in Cepheid (NASDAQ:CPHD). Redmile Group has a $11 million position in the stock, comprising 1.9% of its 13F portfolio. Sitting at the No. 2 spot is Mario Gabelli of GAMCO Investors, with a $8.4 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining hedgies that are bullish include D. E. Shaw’s D E Shaw, Israel Englander’s Millennium Management and Matthew Hulsizer’s PEAK6 Capital Management.
Due to the fact Cepheid (NASDAQ:CPHD) has faced dropping sentiment from the entirety of the hedge funds we track, logic holds that there exists a select few hedge funds that slashed their full holdings in Q1. Intriguingly, Drew Cupps’s Cupps Capital Management said goodbye to the biggest investment of the 450+ funds we track, valued at an estimated $13.4 million in stock. Steven Cohen’s fund, SAC Capital Advisors, also said goodbye to its stock, about $1.8 million worth. These moves are interesting, as total hedge fund interest was cut by 1 funds in Q1.
Insider trading activity in Cepheid (NASDAQ:CPHD)
Bullish insider trading is particularly usable when the company we’re looking at has experienced transactions within the past half-year. Over the latest half-year time frame, Cepheid (NASDAQ:CPHD) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll also examine the relationship between both of these indicators in other stocks similar to Cepheid (NASDAQ:CPHD). These stocks are Cognex Corporation (NASDAQ:CGNX), Bio-Rad Laboratories, Inc. (NYSE:BIO), Itron, Inc. (NASDAQ:ITRI), Bruker Corporation (NASDAQ:BRKR), and FEI Company (NASDAQ:FEIC). This group of stocks are in the scientific & technical instruments industry and their market caps are closest to CPHD’s market cap.